Common Car Insurance Myths and Misconceptions Author:    Posted under: Auto InsuranceAuto Insurance questions answered


Most people consider car insurance complicated; much more so because of misinformation and myths. Here are a few:

  • I will not be charged if the accident is not my fault.

    Whatever happens, whether it was your fault or not, the insurance company will still have the last say.

  • Bright red cars have more expensive insurance rates.

    The color of your car does not affect your insurance rates. It is not a factor of how insurers determine your rates.

  • Insurance rates are about the same in all companies.

    Insurance rates vary dramatically from company to company. This is the reason why you should look for a company that gives the best coverage at the best possible price.

  • My driving history is the only factor that determines my car insurance rate.

    There are a lot of factors that insurers check and evaluate when determining car insurance rates. Driving history is one factor among others such as age, type of car, the intended use of the vehicle, the theft rate in your area, and so on.

  • A speeding ticket will increase my insurance rates.

    One speeding ticket will not affect your insurance rate. Speeding tickets with 50MPH above the speed limit, however, will increase your insurance rates.

  • My rate will go down if I stay accident- and ticket-free.

    Staying free of accidents and tickets does not lower your rates. There are other factors that determine your rates; therefore your rates will most likely stay the same or even increase (when repair fees or the theft rate in your area increases, and so on).

  • If I lend my car to someone and he or she gets into an accident or collision, his or her insurance will pay for it.

    Your friend’s insurance will not pay for the accident costs. Your insurance will put the claim on your record as if you have caused the collision.

  • Less expensive, smaller cars have cheaper insurance rates.

    This depends on your insurance company. In most cases, it is actually more expensive to insure smaller cars because they are more likely to sustain more damage and be “totaled” in accidents.

  • “No-fault insurance” is the insurance that you receive for an accident that is not your fault.
    The insurance company pays your injury-related bills whether the accident is your fault or not.
  • If my car gets stolen or vandalized, my insurance will cover for it.

    Unless you have comprehensive coverage, your insurance will not cover for damage due to vandalism, theft, acts of God, crime and weather.  If you want to be fully insured for all of these, you should get collision and comprehensive insurance coverage.

  • Mechanical problems are covered by comprehensive insurance.
    Comprehensive insurance covers non-accident-related damages like fire, weather, vandalism and so on. You are responsible for your mechanical problems.
  • My auto-policy covers items stolen from my car.

    Your auto-policy does not insure the items inside your car. You may have a homeowners or renters policy that may do so.

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